Execution Copy
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ANCHOR ADVANCED PRODUCTS, INC.
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$100,000,000
11 3/4% Senior Notes 2004
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PURCHASE AGREEMENT
DATED AS OF MARCH 26, 1997
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
CIBC Wood Gundy Securities Corp.
NationsBanc Capital Markets, Inc.
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ANCHOR ADVANCED PRODUCTS, INC.
$100,000,000 Principal Amount of
11 3/4% Senior Notes due 2004
PURCHASE AGREEMENT
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▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
CIBC WOOD GUNDY SECURITIES CORP.
NATIONSBANC CAPITAL MARKETS, INC.
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Anchor Advanced Products, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell an aggregate of $100,000,000 in principal amount of
11 3/4% Senior Notes due 2004 (the "Senior Notes") of the Company, to ▇▇▇▇▇▇▇▇▇,
Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation ("DLJ"), CIBC Wood Gundy Securities
Corp. ("CIBC") and NationsBanc Capital Markets, Inc. ("NationsBanc" and,
together with DLJ and CIBC, the "Initial Purchasers") to be issued pursuant to
an indenture (the "Indenture") between the Company and Fleet National Bank, as
trustee (the "Trustee"). The payment of principal of, premium and Liquidated
Damages (as defined in the Indenture), if any, and interest on the Senior Notes
and the Company's new 3/4% Senior Notes due 2004 to be issued in exchange for
the Senior Notes in accordance with the provisions of the Registration Rights
Agreement referred to below (the "New Senior Notes" and, together with the
Senior Notes, the "Notes") will be unconditionally guaranteed on a senior basis
by (i) Anchor Holdings, Inc., ("Holdings") the direct parent of the Company, and
(ii) any subsidiary of the Company formed or acquired after the Closing Date (as
defined below) that executes an additional guarantee in accordance with the
provisions of the Indenture, and their respective successors and assigns
(collectively, the "Guarantors"), pursuant to their guarantees (the
"Guarantees"). The Notes and the Guarantees are hereinafter collectively
referred to as the "Securities." Capitalized terms used but not defined herein
shall have the meanings given to such terms in the Indenture.
1. ISSUANCE OF SECURITIES. The Senior Notes will be offered and sold to
the Initial Purchasers pursuant to an exemption from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
Company has prepared a preliminary offering memorandum, dated March 5, 1997 (the
"Preliminary Offering Memorandum") and a final offering memorandum, dated March
, 1997 (the "Offering Memorandum" and, together with the Preliminary Offering
Memorandum, the "Offering Documents"), relating to the Company and the Senior
Notes.
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Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Senior Notes
(and all securities issued in exchange therefor or in substitution thereof)
shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the representations
and warranties contained in, and subject to the terms and conditions of, this
Agreement, (i) the Company agrees to issue and sell the Senior Notes to the
Initial Purchasers, and (ii) each Initial Purchaser agrees, severally and not
jointly, to purchase Senior Notes from the Company in the principal amount set
forth opposite the name of such Initial Purchaser in Schedule I at a price of
97.0% of the principal amount of the Senior Notes (the "Purchase Price").
3. TERMS OF OFFERING. The Initial Purchasers have advised the Company
that the Initial Purchasers will make offers (the "Exempt Resales") of the
Senior Notes purchased by the Initial Purchasers hereunder on the terms set
forth in the Offering Memorandum, as amended or supplemented, solely to (i)
persons (each, a "144A Purchaser") whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers" as defined in Rule 144A under the
Act ("QIBs") and (ii) a limited number of other institutional "accredited
investors," as defined in Rule 501(a) (1), (2), (3) and (7) under the Act, that
make certain representations and agreements to the Company (each, an "Accredited
Institution") (such persons specified in clauses (i) and (ii) being referred to
herein as the "Eligible Purchasers"). The Initial Purchasers will offer the
Senior Notes to Eligible Purchasers initially at a price equal to 100% of the
principal amount thereof. Such price may be changed at any time without notice.
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Holders (including subsequent transferees) of the Senior Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as defined
below), in substantially the form of Exhibit A hereto, for so long as such
Senior Notes constitute "Transfer Restricted Securities" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Company will agree to file with the Securities and Exchange Commission (the
"Commission") under the circumstances set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to (A) the New Senior Notes to be offered in exchange for the Senior Notes,
(such offer to exchange being referred to as the "Registered Exchange Offer")
and/or (ii) a shelf registration statement pursuant to Rule 415 under the Act
(the "Shelf Registration Statement" and together with the Exchange Offer
Registration Statement, the "Registration Statements") relating to the resale by
certain holders of the Senior Notes, and to use their best efforts to cause such
Registration Statements to be declared effective. This Agreement, the Indenture
and the Registration Rights Agreement are hereinafter referred to collectively
as the "Operative Documents."
4. DELIVERY AND PAYMENT. Delivery to the Initial Purchasers by the
Company of, and payment by the Initial Purchasers for, the Senior Notes shall be
made at 10:00 A.M., New York City time, on March , 1997 (the "Closing Date") at
the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
such other time or place as the Initial Purchasers and the Company shall
designate.
One or more Senior Notes in definitive form, registered in the name of
Cede & Co., as nominee of the Depository Trust Company ("DTC"), or such other
names as the Initial Purchasers may request upon at least one business day's
notice to the Company, having an aggregate principal amount corresponding to the
aggregate principal amount of Senior Notes sold pursuant to Exempt Resales to
QIBs and to Accredited Institutions (the "Master Note"), shall be delivered by
the Company to the Initial Purchasers, against payment by the Initial Purchasers
of the purchase price thereof by wire transfer of same day funds to the order of
the Company or as the Company may direct. The Master Note in definitive form
shall be made available to the Initial Purchasers for inspection not later than
9:30 A.M. on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the Initial
Purchasers:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, to confirm such advice in writing,
(i) of receipt of any notification with respect to the issuance by any
state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Senior
Notes for offering or sale in any jurisdiction designated by the
Initial Purchasers pursuant to Section 5(f), or the initiation of any
proceeding for such purpose by any state securities commission or other
regulatory authority, and (ii) of the happening of any event that makes
any statement of a material fact made in the Offering Documents (or any
amendment or supplement thereto) untrue or that requires the making of
any additions to or changes in the Offering Documents (or any amendment
or supplement thereto) in order to make the statements therein, in the
light of the circumstances in which they are made, not misleading. The
Company shall use its reasonable best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption
from qualification of the Senior Notes under any state securities or
Blue Sky laws, and, if at any time any state securities
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commission or other regulatory authority shall issue any stop order or
order suspending the qualification or exemption from qualification of
any of the Senior Notes under any state securities or Blue Sky laws,
the Company shall use its reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) Subject to paragraph (e) below, to furnish to the Initial
Purchasers, without charge, as many copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments or
supplements thereto, as the Initial Purchasers may reasonably request.
The Company consents to the use of the Preliminary Offering Memorandum
and the Offering Memorandum, and any amendments or supplements thereto,
by the Initial Purchasers in connection with Exempt Resales.
(c) Not to amend or supplement the Offering Memorandum,
whether before or after the Closing Date, unless (i) the Initial
Purchasers have been previously advised thereof, and (ii) the Initial
Purchasers have not reasonably objected thereto; and to prepare,
promptly upon the Initial Purchasers' request, any amendment or
supplement to the Offering Memorandum that the Initial Purchasers deem
necessary or advisable in connection with Exempt Resales.
(d) Subject to paragraph (e) below, if, after the date hereof
and prior to the completion of Exempt Resales of the Senior Notes by
the Initial Purchasers, any event shall occur as a result of which it
becomes necessary to amend or supplement the Offering Memorandum to
comply with any law or to make the statements therein, in the light of
the circumstances at the time that the Offering Memorandum is delivered
to an Eligible Purchaser which is a prospective purchaser, not
misleading, to promptly (i) prepare an appropriate amendment or
supplement to the Offering Memorandum so that the statements in the
Offering Memorandum, as so amended or supplemented, will comply with
all applicable laws and will not, in the light of the circumstances at
the time it is so delivered, be misleading, and (ii) furnish each
Initial Purchaser with such number of copies of the Offering
Memorandum, as amended or supplemented, as such Initial Purchaser may
reasonably request.
(e) Prior to the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement if, in the
reasonable judgment of the Initial Purchasers, the Initial Purchasers
or any of their affiliates (as such term is defined in the rules and
regulations under the Act) are required to deliver an Offering
Memorandum in connection with sales of, or market-making activities
with respect to, the Senior Notes, (A) to periodically amend or
supplement the Offering Memorandum so that the information contained in
the Offering Memorandum complies with the requirements of Rule 144A of
the Act, (B) to amend or supplement the Offering Memorandum when
necessary to reflect any material changes in the information provided
therein so that the Offering Memorandum will not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing as of the date the Offering Memorandum is so
delivered, not misleading and (C) to provide the Initial Purchasers
with copies of each such amended or supplemented Offering Memorandum,
as the Initial Purchasers may reasonably request.
Following the consummation of the Exchange Offer or the
effectiveness of an applicable shelf registration statement and for so
long as the Notes are outstanding if, in the reasonable judgment of the
Initial Purchasers, the Initial Purchasers or any of their affiliates
(as such term is defined in the rules and regulations under the Act)
are required to deliver a prospectus in
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connection with sales of, or market-making activities with respect to,
such securities, (A) to periodically amend the applicable registration
statement so that the information contained therein complies with the
requirements of Section 10(a) of the Act, (B) to amend the applicable
registration statement or supplement the related prospectus or the
documents incorporated therein when necessary to reflect any material
changes in the information provided therein so that the registration
statement and the prospectus will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances existing
as of the date the prospectus is so delivered, not misleading and (C)
to provide the Initial Purchasers with copies of each amendment or
supplement filed and such other documents as the Initial Purchasers may
reasonably request.
The Company hereby expressly acknowledges that the
indemnification and contribution provisions of Section 8 hereof are
specifically applicable and relate to each offering memorandum,
registration statement, prospectus, amendment or supplement referred to
in this Section 5(e).
(f) To (i) cooperate with the Initial Purchasers and counsel
for the Initial Purchasers in connection with the qualification of the
Senior Notes for offer and sale by the Initial Purchasers under the
state securities or Blue Sky laws of such jurisdictions as the Initial
Purchasers may request, (ii) continue such qualification in effect so
long as required for Exempt Resales of the Senior Notes and (iii) file
such consents to service of process or other documents as may be
necessary in order to effect such qualification; provided that in no
event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified, or take any action which
would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) So long as any of the Notes are outstanding and the
Company is subject to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), to file reports pursuant
to Section 13 or 15(d) of the Exchange Act, and, during the period of
two years following the date of this Agreement, to deliver to the
Initial Purchasers, promptly upon their becoming available, (i) copies
of all current, regular and periodic reports filed by the Company with
any securities exchange or with the Commission or any governmental
authority succeeding to any of the Commission's functions, and (ii)
copies of each report or other publicly available information of the
Company mailed to the holders of Notes and such other publicly
available information concerning the Company and its subsidiaries as
the Initial Purchasers may request.
(h) To use the net proceeds from the sale of the Senior Notes
in the manner specified in the Offering Memorandum (and any amendments
or supplements thereto) under the caption "Use of Proceeds."
(i) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of
the Notes.
(j) Except as otherwise agreed to by the parties hereto, to
pay all costs, expenses, fees and taxes incident to,
(1) the preparation, printing, filing and
distribution under the Act of the Offering Documents
(including financial statements and exhibits) and all
amendments and supplements to any of them,
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(2) the printing and delivery of the Operative
Documents, the Senior Notes, the preliminary and supplemental
Blue Sky memoranda and all other agreements, memoranda,
correspondence and other documents printed and delivered in
connection herewith and with the Exempt Resales (including in
each case any disbursements of counsel to the Initial
Purchasers relating to such printing and delivery),
(3) the issuance and delivery by the Company of the
Senior Notes,
(4) the registration or qualification of the Senior
Notes for offer and sale under the securities or Blue Sky laws
of the several states (including in each case the reasonable
fees and disbursements of counsel to the Initial Purchasers
relating to such registration or qualification and memoranda
relating thereto),
(5) furnishing such copies of the Preliminary
Offering Memorandum and the Offering Memorandum and all
amendments and supplements thereto as may be requested for use
in connection with the Exempt Resales,
(6) the rating of the Senior Notes by rating
agencies, if any,
(7) the reasonable fees, disbursements and expenses
of the Company's and Guarantors' counsel and accountants,
(8) all expenses and listing fees in connection with
the application for quotation of the Senior Notes in the
National Association of Securities Dealers, Inc. Automated
Quotation System - PORTAL ("Portal"),
(9) all fees and expenses (including reasonable fees
and expenses of counsel) of the Company and the Guarantors in
connection with approval of the Securities by DTC for
"book-entry" transfer, and
(10) the performance by the Company of its other
obligations under this Agreement.
(k) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than a default by the Initial
Purchasers) or if for any reason the Company shall be unable or
unwilling to perform their obligations hereunder, the Company shall,
except as otherwise agreed by the parties hereto, reimburse the Initial
Purchasers for the fees and expenses to be paid or reimbursed pursuant
to Section 5(j) above, and reimburse the Initial Purchasers for all
out-of-pocket expenses (including the reasonable fees and expenses of
counsel to the Initial Purchasers) reasonably incurred by the Initial
Purchasers in connection with the transactions contemplated by this
Agreement.
(l) Prior to the Closing Date, to furnish to the Initial
Purchasers, as soon as they have been prepared by the Company, a copy
of any consolidated financial statements of the Company or Holdings for
any period subsequent to the period covered by the financial statements
appearing in the Offering Memorandum.
(m) Not to distribute prior to the Closing Date any offering
material in connection with the offering and sale of the Senior Notes
other than the Offering Memorandum.
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(n) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act)
that would be integrated with the sale of the Senior Notes in a manner
that would require the registration under the Act of the sale to the
Initial Purchasers or the Eligible Purchasers of Senior Notes.
(o) For so long as any of the Notes remain outstanding and
during any period in which the Company is not subject to Section 13 or
15(d) of the Exchange Act, to make available to any Eligible Purchaser
or beneficial owner of Notes in connection with any sale thereof and
any prospective purchaser of such Notes from such Eligible Purchaser or
beneficial owner, the information required by Rule 144A(d)(4) under the
Act.
(p) To comply with their agreements in the Registration Rights
Agreement, and all agreements set forth in the representation letters
of the Company to DTC relating to the approval of the Senior Notes by
DTC for "book-entry" transfer.
(q) To cause the Exchange Offer, if available, to be made in
the appropriate form, as contemplated by the Registration Rights
Agreement, to permit registration of the New Senior Notes to be offered
in exchange for the Senior Notes and to comply with all applicable
federal and state securities laws in connection with the Registered
Exchange Offer.
(r) To use its best efforts to effect the inclusion of the
Senior Notes in PORTAL.
(s) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by
the Company prior to the Closing Date and to satisfy all conditions
precedent to the delivery of the Senior Notes.
6. REPRESENTATIONS AND WARRANTIES. Each of the Company and the
Guarantors (as applicable) represents and warrants to each Initial Purchaser
that:
(a) The Offering Documents have been prepared in connection
with the Exempt Resales. The Preliminary Offering Memorandum as of its
date does not, and the Offering Memorandum as of its date does not and
as of the Closing Date will not, and any amendment or supplement
thereto will not, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties contained in this paragraph (a) shall not apply to
statements or omissions in the Offering Documents (or any amendment or
supplement thereto) based upon information relating to the Initial
Purchasers furnished to the Company in writing by the Initial
Purchasers expressly for use therein. No stop order preventing the use
of the any of the Offering Documents, or any amendment or supplement
thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Securities Act, have been issued.
(b) The Company (i) is duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of
incorporation, (ii) has full corporate power and authority to carry on
its respective business as it is currently being conducted and to own,
lease and operate its respective properties, and (iii) is duly
qualified and in good standing as a foreign corporation registered to
do business in each jurisdiction in which the nature of its business or
its ownership
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or leasing of property requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the financial condition, business, property, prospects, net worth or
results of operations of the Company (a "Material Adverse Effect").
(c) Holdings (i) is duly organized, validly existing and in
good standing under the laws of its respective jurisdiction of
incorporation, (ii) has full corporate power and authority to carry on
its respective business as it is currently being conducted and to own,
lease and operate its respective properties, and (iii) is duly
qualified and in good standing as a foreign corporation registered to
do business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect.
(d) All of the outstanding capital stock of the Company and
Holdings has been duly authorized and validly issued, is fully paid and
nonassessable, is not subject to preemptive or similar rights and,
except as described in the Offering Memorandum, there are no
outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or
other equity interest in the Company or Holdings.
(e) Each of the Company and Holdings has all necessary
corporate power and authority to enter into and perform its respective
obligations under the Operative Documents, the Company has the
necessary corporate power and authority to issue, sell and deliver the
Senior Notes to the Initial Purchasers and Holdings has the necessary
corporate power and authority to issue the Guarantees. At December 31,
1996, on a consolidated basis, after giving pro forma effect to the
issuance and sale of the Senior Notes pursuant thereto, Holdings would
have an authorized and outstanding consolidated capitalization as set
forth in the Offering Memorandum under the caption "Capitalization."
(f) The Company is not (i) in violation of its charter or
bylaws, (ii) in default in any material respect in the performance of
any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of the
business of the Company, to which the Company is a party or by which it
or its property is bound, or (iii) in violation of any local, state or
federal law, statute, ordinance, rule, regulation, requirement,
judgment or court decree (including, without limitation, environmental
laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to the Company or any of its assets or properties
(whether owned or leased), other than violations or defaults that would
not reasonably be expected to have a Material Adverse Effect. To the
best knowledge of the Company, there exists no condition that, with
notice, the passage of time or otherwise, would constitute a default
under any such document or instrument, except for such defaults that
could not reasonably be expected to have a Material Adverse Effect.
(g) Holdings is not (i) in violation of its charter or bylaws,
(ii) in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture or instrument material to the conduct of the business of
Holdings, to which Holdings is a party or by which it or its property
is bound, or (iii) in violation of any local, state or federal law,
statute, ordinance, rule, regulation, requirement, judgment or court
decree (including, without limitation, environmental laws, statutes,
ordinances, rules, regulations, judgments or court decrees) applicable
to Holdings or any of its assets or properties (whether owned or
leased), other
8
than violations that would not reasonably be expected to have a
Material Adverse Effect. To the best knowledge of Holdings, there
exists no condition that, with notice, the passage of time or
otherwise, would constitute a default under any such document or
instrument, except for such defaults that could not reasonably be
expected to have a Material Adverse Effect.
(h) None of (i) the execution, delivery or performance by the
Company or Holdings of this Agreement and the other Operative
Documents, (ii) the issuance and sale of the Notes by the Company or
the issuance of the Guarantees by Holdings and (iii) the consummation
by the Company of the transactions described in the Offering Memorandum
under the caption "Use of Proceeds," will conflict with or constitute a
breach of any of the terms or provisions of, or a default under, or
result in the imposition of a lien or encumbrance on any properties of
the Company or Holdings, as the case may be, or an acceleration of
indebtedness pursuant to, (1) the charter or bylaws of the Company or
Holdings, as the case may be, (2) any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company or Holdings, as the case may be, is a party or by which it or
its property is bound, or (3) any law or administrative regulation
applicable to the Company or Holdings, as the case may be, or any of
its assets or properties, or any judgment, order or decree of any court
or governmental agency or authority entered in any proceeding to which
the Company or Holdings, as the case may be, was or is now a party or
to which it or its properties may be subject. No consent, approval,
authorization or order of, or filing or registration with, any
regulatory body, administrative agency, or other governmental agency
(except as securities or Blue Sky laws of the various states may
require) that has not been made or obtained is required for the
execution, delivery and performance of the Operative Documents and the
valid issuance and sale of the Securities. No consents or waivers from
any person are required to consummate the transactions contemplated by
the Operative Documents or the Offering Documents, other than such
consents and waivers as have been or will be obtained prior to the
Closing Date or, in the case of the Registration Rights Agreement and
the transactions contemplated thereby, will be obtained and made) under
the Act, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and state securities or Blue Sky laws and regulations.
(i) This Agreement has been duly authorized and validly
executed by each of the Company and Holdings and (assuming the due
execution and delivery thereof by the Initial Purchasers) is a legally
valid and binding obligation of each of the Company and Holdings,
enforceable against each of them in accordance with its terms, except
as the enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights generally, (ii)
limited by general principles of equity (whether considered in a
proceeding at law or in equity) and (iii) limited by securities laws
prohibiting or limiting the availability of, and public policy against,
indemnification or contribution. The Offering Memorandum contains an
accurate summary, in all material respects, of the terms of this
Agreement.
(j) Each of the Company and Holdings has duly authorized the
Indenture, and when each of the Company and Holdings has duly executed
and delivered it (assuming the due authorization, execution and
delivery thereof by the Trustee), the Indenture will be a legally valid
and binding obligation of each of the Company and the Guarantor,
enforceable against each of them in accordance with its terms, except
as the enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights generally and
(ii) limited by general principles of equity
9
(whether considered in a proceeding at law or in equity). The Offering
Memorandum contains an accurate summary, in all material respects, of
the terms of the Indenture.
(k) The Company has duly authorized the Senior Notes and, when
issued and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance
with the terms hereof, the Senior Notes will conform to the description
thereof in the Offering Memorandum, and will be the legally valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability thereof may
be (i) subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement
of creditors rights generally and (ii) limited by general principles of
equity (whether considered in a proceeding at law or in equity).
(l) Holdings has duly authorized the Guarantees and, when
issued and authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance
with the terms hereof, the Guarantees will conform to the description
thereof in the Offering Memorandum, and will be the legally valid and
binding obligations of Holdings, enforceable against Holdings in
accordance with their terms, except as the enforceability thereof may
be (i) subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the enforcement
of creditors rights generally and (ii) limited by general principles of
equity (whether considered in a proceeding at law or in equity).
(m) The Company has duly authorized the New Senior Notes and,
when issued and authenticated in accordance with the terms of the
Registered Exchange Offer and the Indenture, the New Senior Notes will
conform to the description thereof in the applicable Registration
Statement, and will be the legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as the enforceability thereof may be (i) subject to
applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws in effect which affect the enforcement of creditors rights
generally and (ii) limited by general principles of equity (whether
considered in a proceeding at law or in equity).
(n) The Registration Rights Agreement has been duly authorized
and validly executed by each of the Company and Holdings and (assuming
the due execution and delivery thereof by the Initial Purchasers) is a
legally valid and binding obligation of each of the Company and
Holdings, enforceable against it in accordance with its terms, except
as the enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights generally, (ii)
limited by general principles of equity (whether considered in a
proceeding at law or in equity) and (iii) limited by securities laws
prohibiting or limiting the availability of, and public policy against,
indemnification or contribution. The Offering Memorandum contains an
accurate summary, in all material respects, of the terms of
Registration Rights Agreement.
(o) There is (i) no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official,
domestic or foreign, now pending, threatened, or, to the knowledge of
the Company, contemplated to which the Company or Holdings is or may be
a party or to which the business or property of the Company or Holdings
is or may be subject, (ii) no statute, rule, regulation or order that
has been enacted, adopted or issued by any governmental agency or, to
the best knowledge of the Company, proposed by any governmental body or
(iii)
10
no injunction, restraining order or order of any nature issued by a
federal or state court of competent jurisdiction to which the Company
or Holdings is or may be subject that, in the case of clauses (i), (ii)
and (iii) above, (1) is required to be disclosed in the Offering
Memorandum and that is not so disclosed, (2) might have a Material
Adverse Effect or (3) would interfere with or adversely affect the
issuance of the Senior Notes or the Guarantees.
(p) Except as disclosed in the Offering Memorandum, no holder
of any security of the Company or Holdings has any right or, by reason
of the execution by the Company and Holdings of this Agreement or any
other Operative Document or the consummation of the transactions
contemplated hereby or and thereby, have the right to require
registration of any security of the Company or Holdings.
(q) The Company is not involved in any material labor dispute
nor, to the knowledge of the Company, is any material dispute
threatened which, if such dispute were to occur, could have a Material
Adverse Effect.
(r) The Company has not violated any safety or similar law
applicable to its business, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the rules and regulations promulgated thereunder, except
for such instances of noncompliance that, either singly or in the
aggregate, could not have a Material Adverse Effect.
(s) Except as set forth in the Offering Memorandum, the
Company is in compliance with all applicable existing federal, state,
local and foreign laws and regulations (collectively, "Environmental
Laws") relating to protection of human health or the environment or
imposing liability or standards of conduct concerning any Hazardous
Material (as defined below), except for such instances of noncompliance
that, either singly or in the aggregate, could not have a Material
Adverse Effect. The term "Hazardous Material" means (i) any "hazardous
substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, (ii) any "hazardous
waste" as defined by the Resource Conservation and Recovery Act, as
amended, (iii) any petroleum or petroleum product, (iv) any
polychlorinated biphenyl and (v) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material, waste or substance
regulated under or within the meaning of any other Environmental Law.
Except as set forth in the Offering Memorandum, there is no alleged
liability, or, to the best knowledge and information of the Company,
potential liability (including, without limitation, alleged or
potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property
damages, personal injuries, or penalties) of the Company or any of its
subsidiaries arising out of, based on, or resulting from (1) the
presence or release into the environment of any Hazardous Material at
any location currently or previously owned by the Company or any of its
subsidiaries or at any location currently or previously used or leased
by the Company or any of its subsidiaries, or (2) any violation or
alleged violation of any Environmental Law, except in each case with
respect to clause (1) and (2), alleged or potential liabilities that,
singly or in the aggregate, could not have a Material Adverse Effect.
(t) The Company owns or possesses the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names (collectively, "Intellectual Property") presently employed
by it or which are proposed
11
to be employed by it in connection with the businesses now operated by
it or which are proposed to be operated by it, except where the failure
to own or possess such Intellectual Property could not, either singly
or in the aggregate, have a Material Adverse Effect, and the Company
has not received any notice that its use of any Intellectual Property
allegedly infringes upon, or conflicts with, rights asserted by others,
except for such instances that, singly or in the aggregate, could not
have a Material Adverse Effect if an unfavorable decision, judgment,
ruling or finding is rendered against the Company.
(u) Except as set forth in the Offering Memorandum, all tax
returns required to be filed by the Company in any jurisdiction have
been filed, and all material taxes (including, but not limited to,
withholding taxes, penalties and interest, assessments, fees and other
charges due or claimed to be due from any taxing authority) have been
paid other than those (i) being contested in good faith and for which
adequate reserves have been provided, or (ii) currently payable without
penalty or interest.
(v) Except as set forth in the Offering Memorandum or that,
singly or in the aggregate, could not have a Material Adverse Effect,
(i) the Company has (1) such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("Permits"),
including, without limitation, under any applicable Environmental Laws,
as are necessary to own, lease and operate its respective properties
and to conduct its business as presently conducted, and (2) fulfilled
and performed all of its material obligations with respect to the
Permits, and (ii) no event has occurred that could allow, or after
notice or lapse of time could allow, revocation or termination of any
Permit or that could result in any other material impairment of the
rights granted to the Company under any Permit, and the Company has no
reason to believe that any governmental body or agency is considering
limiting, suspending or revoking any Permit.
(w) Except as set forth in the Offering Memorandum or that,
singly or in the aggregate, could not have a Material Adverse Effect,
(i) the Company has good and marketable title, free and clear of all
liens, claims, encumbrances and restrictions except liens for taxes not
yet due and payable, to all property and assets described in the
Offering Memorandum as being owned by it, (ii) each lease to which the
Company is a party is valid and binding and no default has occurred or
is continuing thereunder and (iii) the Company enjoys peaceful and
undisturbed possession under all such leases to which it is a party as
lessee.
(x) The Company maintains adequate insurance for its
businesses and the value of its respective properties (including,
without limitation, public liability insurance, third party property
damage insurance and replacement value insurance), and all such
insurance is outstanding and in force as of the date hereof.
(y) The financial statements, together with related notes
forming part of the Offering Documents (and any amendment or supplement
thereto), present fairly the consolidated financial position, results
of operations and changes in financial position of Holdings on the
basis stated in the Offering Documents at the respective dates or for
the respective periods to which they apply, and such financial
statements and related schedules and notes have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved, except as disclosed therein
and the other financial and statistical information and data set forth
in the Offering Documents (and any amendment or supplement thereto) is,
in all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
Holdings. The pro forma financial data are, in all
12
material respects, accurately presented and prepared in good faith on
the basis of the assumptions described therein, and such assumptions
are reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(z) Each of the Company and Holdings maintains a system of
internal accounting controls sufficient to provide assurance that: (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; and (iii) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto.
(aa) Subsequent to the dates for which information is given in
the Offering Documents and up to the Closing Date, unless set forth in
the Offering Memorandum or the Company has notified the Initial
Purchasers: (i) neither the Company nor Holdings has incurred any
liabilities or obligations, direct or contingent, which are material,
individually or in the aggregate, to the Company or Holdings, nor
entered into any material transactions not in the ordinary course of
business; (ii) there has not been any decrease in the Company's or
Holdings' capital stock or any increase in long-term indebtedness to
meet working capital requirements or any material increase in
short-term indebtedness of the Company or Holdings or any payment of or
declaration to pay any dividends or any other distribution with respect
to the Company's or Holdings' capital stock; and (iii) there has not
been any event or series of events that would have a Material Adverse
Effect.
(ab) Prior to and after the issuance of the Senior Notes, (i)
the present fair salable value of the assets of the Company exceeded
and will exceed the amount that will be required to be paid on, or in
respect of, the debts and other liabilities (including contingent
liabilities) of the Company as they become absolute and matured, (ii)
the assets of the Company do not constitute and will not constitute
unreasonably small capital to carry out their businesses as conducted
or as proposed to be conducted, and (iii) the Company does not intend
to, or believe that it will, incur debts or other liabilities beyond
its ability to pay such debts and liabilities as they mature. In
computing the amount of such contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in
light of all the facts and circumstances existing at such time,
represents the amount than can reasonably be expected to become an
actual or matured liability.
(ac) Neither the Company nor any agent thereof acting on its
behalf, has taken or will take any action that might cause this
Agreement or the issuance or sale of the Senior Notes to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224)
of the Board of Governors of the Federal Reserve System, in each case
as in effect now or as the same may hereafter be in effect on the
Closing Date.
(ad) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended.
(ae) Coopers & ▇▇▇▇▇▇▇ L.L.P. is an independent public
accountant with respect to the Company and Holdings as required by the
Act.
13
(af) When the Senior Notes are issued and delivered pursuant
to this Agreement, such Senior Notes will not be of the same class
(within the meaning of Rule 144A under the Act) as securities of the
Company that are listed on a national securities exchange registered
under Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system.
(ag) Assuming (i) that the representations and warranties of
the Initial Purchasers in Section 7 hereof are true, (ii) that the
representations of the Accredited Institutions set forth in the
certificates of such Accredited Institutions in the form set forth in
Annex A to the Offering Memorandum are true, (iii) compliance by the
Initial Purchasers with their covenants set forth in Section 7 hereof,
(iv) that none of the Eligible Purchasers is an affiliate of the
Company and (v) that each of the Eligible Purchasers is a QIB or an
Accredited Institution, the purchase and resale of the Senior Notes
pursuant hereto (including pursuant to the Exempt Resales) is exempt
from the registration requirements of the Act. No form of general
solicitation or general advertising was used by the Company or any of
their representatives (other than the Initial Purchasers, as to whom
the Company makes no representation) in connection with the offer and
sale of the Senior Notes, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine,
or similar medium or broadcast over television or radio, or any seminar
or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as
the Senior Notes have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
(ah) The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Securities to be purchased by
the Eligible Purchasers will not involve any prohibited transaction
within the meaning of Section 406 of ERISA or Section 4975 of the Code
with respect to any employee benefit plan of the Company. The
representation made by the Company in the preceding sentence is made in
reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible
Purchasers as set forth in the Offering Documents under the Section
entitled "Notice to Investors."
(ai) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information
specified in, and meeting the requirements of, Rule 144A(d)(4) under
the Act.
(aj) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
7. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF THE INITIAL
PURCHASERS.
(a) Each Initial Purchaser, severally and not jointly,
represents and warrants to the Company as follows:
(1) Each Initial Purchaser represents and warrants
with respect to itself that such Initial Purchaser is either a
QIB or an Accredited Institution, in either case with such
knowledge and experience in financial and business matters as
are necessary in order to evaluate the merits and risks of an
investment in the Senior Notes.
14
(2) Such Initial Purchaser (i) is not acquiring the
Senior Notes with a view to any distribution thereof or with
any present intention of offering or selling any of the Senior
Notes in a transaction that would violate the Act or the
securities laws of any State of the United States or any other
applicable jurisdiction, (ii) will be reoffering and reselling
the Senior Notes only to QIBs in reliance on the exemption
from the registration requirements of the Act provided by Rule
144A and to a limited number of Accredited Institutions that
execute and deliver a letter containing certain
representations and agreements in the form attached as Annex A
to the Offering Memorandum and (iii) has not solicited and,
unless and until the Senior Notes are registered under the
Act, will not solicit any offer to buy or offer to sell the
Senior Notes by means of any form of general solicitation or
general advertising (as such terms are defined in Regulation D
under the Act) or in any manner involving a public offering
within the meaning of the Act.
(3) Each Initial Purchaser also understands that the
Company and, for purposes of the opinions to be delivered to
the Initial Purchasers pursuant to Sections 9(d) and (e)
hereof, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the
foregoing representations and the Initial Purchasers hereby
consent to such reliance.
(b) The Initial Purchasers agree that, in connection with the
Exempt Resales, the Initial Purchasers will solicit offers to buy the
Senior Notes only from, and will offer to sell the Senior Notes only
to, the Eligible Purchasers. The Initial Purchasers further agree that
they will offer to sell the Senior Notes only to, and will solicit
offers to buy the Senior Notes only from, persons who in purchasing
such Senior Notes will be deemed to have represented and agreed (1) if
such Eligible Purchaser is a QIB, that they are purchasing the Senior
Notes for their own account or an account with respect to which they
exercise sole investment discretion and that they or such accounts are
QIBs, (2) that such Senior Notes will not have been registered under
the Act and may be resold, pledged or otherwise transferred, only (A)
(I) inside the United States to a person who the seller reasonably
believes is a "qualified institutional buyer" within the meaning of
Rule 144A under the Act in a transaction meeting the requirements of
Rule 144A, (II) in a transaction meeting the requirements of Rule 144
under the Act, (III) outside the United States to a foreign person in a
transaction meeting the requirements of Rule 904 under the Act or (IV)
in accordance with another exemption from the registration requirements
of the Act (and based upon an opinion of counsel if the Company so
requests), (B) to the Company or (C) pursuant to an effective
registration statement under the Act, in each case, in accordance with
any applicable securities laws of any State of the United States or any
other applicable jurisdiction, and (3) that the holder will, and each
subsequent holder is required to, notify any purchaser from it of the
security evidenced thereby of the resale restrictions set forth in (2)
above.
8. INDEMNIFICATION.
(a) Each of the Company and Holdings jointly and severally
agrees to indemnify and hold harmless each Initial Purchaser and each
person, if any, who controls any Initial Purchaser within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Documents (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to
state therein a material fact required to be stated
15
therein or necessary to make the statements therein in the light of the
circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to such Initial
Purchaser furnished in writing to the Company by any Initial Purchaser
expressly for use therein; provided, however, that the indemnification
contained in this paragraph (a) with respect to the Preliminary
Offering Memorandum shall not inure to the benefit of any Initial
Purchaser (or to the benefit of any person controlling such Initial
Purchaser) on account of any such loss, claim, damage, liability or
judgment (i) arising from the sale of the Senior Notes by such Initial
Purchaser to any person if a copy of an Offering Document shall not
have been delivered or sent to such person, at or prior to the written
confirmation of such sale, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained
in an Offering Document was corrected in a subsequent Offering
Document, provided that the Company has delivered such subsequent
Offering Document to the Initial Purchasers in requisite quantity on a
timely basis to permit such delivery or sending or (ii) resulting from
the use by such Initial Purchaser of any offering memorandum,
registration statement or prospectus, or any amendment or supplement
thereto, referred to in Section 5(e) hereof when, under Section 11
hereof, such Initial Purchaser was not permitted to do so; provided
further, however, that the foregoing exceptions in clauses (i) and (ii)
shall not affect the indemnity with respect to any other Initial
Purchaser not otherwise subject to such exceptions.
(b) In case any action shall be brought against any Initial
Purchaser or any person controlling such Initial Purchaser, based upon
any Offering Document or any amendment or supplement thereto and with
respect to which indemnity may be sought against the Company and the
Guarantor, such Initial Purchaser shall promptly notify the Company and
the Guarantor in writing and the Company and the Guarantor shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses. Any Initial Purchaser or any such controlling person shall
have the right to employ separate counsel in any such action and
participate in the defense thereof, but the reasonable fees and
expenses of such counsel shall be at the expense of such Initial
Purchaser or such controlling person unless (i) the employment of such
counsel has been specifically authorized in writing by the Company,
(ii) the Company has failed to assume the defense and employ counsel or
(iii) the named parties to any such action (including any impleaded
parties) include both such Initial Purchaser or such controlling person
and the Company, and such Initial Purchaser or such controlling person
shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional
to those available to the Company (in which case the Company shall not
have the right to assume the defense of such action on behalf of such
Initial Purchaser or such controlling person, it being understood,
however, that the Company shall not, in connection with any one such
action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
such Initial Purchasers and controlling persons, which firm shall be
designated in writing by DLJ, and that all such fees and expenses shall
be reimbursed as they are incurred). The Company shall not be liable
for any settlement of any such action effected without the written
consent of the Company but if settled with the Company's written
consent, the Company agrees to indemnify and hold harmless any Initial
Purchaser and any such controlling person from and against any loss or
liability by reason of such settlement. Notwithstanding the immediately
preceding sentence, if in any case where the fees and expenses of
counsel are at the expense of the indemnifying party and indemnified
party shall
16
have requested the indemnifying party to reimburse the indemnified
party for such fees and expenses of counsel as incurred, such
indemnifying party agrees that it shall be liable for any settlement of
any action effected without its written consent if (i) such settlement
is entered into more than ten business days after the receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall have failed to reimburse the indemnified party in
accordance with such request for reimbursement prior to the date of
such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is
or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(c) Each Initial Purchaser agrees, severally and not jointly,
to indemnify and hold harmless the Company, the Guarantors, their
respective directors and officers, and any person controlling them
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act (collectively the "Company Indemnified Parties"), to the
same extent as the foregoing indemnity from the Company to each Initial
Purchaser but only with reference to information relating to such
Initial Purchaser furnished in writing by such Initial Purchaser
expressly for use in the Offering Documents. In case any action shall
be brought against any Company Indemnified Party in respect of which
indemnity may be sought against an Initial Purchaser, such Initial
Purchaser shall have the rights and duties given to the Company (except
that if the Company shall have assumed the defense thereof, such
Initial Purchaser shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such
Initial Purchaser), and the Company Indemnified Parties shall have the
rights and duties given to such Initial Purchaser by Section 8(b)
hereof.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities and
judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand from the offering of the Senior
Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company and the Initial Purchasers
in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. Except in the case of any indemnity
arising under the last paragraph of Section 5(e) hereof, the relative
benefits received by the Company and the Initial Purchasers shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Senior Notes (before deducting expenses) received by
the Company, and the total discounts and commissions received by the
Initial Purchasers, bear to the total price to investors of the Senior
Notes, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Company and the Initial
Purchasers shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission to state a material fact relates to information supplied
by the Company or the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
17
The Company and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this paragraph were
determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The losses, claims,
damages, liabilities or judgments of an indemnified party referred to
in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8, no Initial Purchaser shall be
required to contribute any amount in excess of the amount by which the
discounts and commissions received by it exceeds the amount of any
damages which such Initial Purchaser has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers' obligations to contribute
pursuant to this Section 8(d) are several in proportion to the
respective principal amount of Senior Notes purchased by each of the
Initial Purchasers hereunder and not joint.
9. CONDITIONS OF THE INITIAL PURCHASERS' OBLIGATIONS. The several
obligations of the Initial Purchasers to purchase the Senior Notes under this
Agreement are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and
Holdings contained in this Agreement shall be true and correct on the
date hereof and on the Closing Date, with the same force and effect as
if made on and as of the date hereof and the Closing Date,
respectively. The Company and Holdings shall have performed or complied
with all of the agreements and satisfied all conditions to be
performed, complied with or satisfied by it on or prior to the Closing
Date.
(b) (1) The Offering Memorandum shall have been printed
and copies distributed to the Initial Purchasers not later
than 9:00 A.M., New York City time, on March 28, 1997, or at
such later date and time as the Initial Purchasers may
approve in writing;
(2) no statute, rule, regulation or order shall have
been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of
the Senior Notes;
(3) no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction
shall have been issued as of the Closing Date or, to the best
knowledge of the Company, threatened against, the Company
which would prevent the issuance of the Senior Notes; and
(4) at the Closing Date, no stop order preventing the
use of the Offering Documents, or any amendment or supplement
thereto, or suspending the qualification or exemption from
qualification of the Senior Notes for sale in any jurisdiction
designated by the Initial Purchasers pursuant to Section 5(f)
hereof shall have been issued and no proceedings for that
purpose shall have been commenced or shall be pending before
or, to the knowledge of the Company, be contemplated.
18
(c) (1) Since the date of the latest balance sheet
included in the Offering Documents, there shall not have been
any event that had a Material Adverse Effect, or any
development involving a prospective change that could have a
Material Adverse Effect, whether or not arising in the
ordinary course of business;
(2) since the date of the latest balance sheet
included in the Offering Documents, there has not been any
change, or any development involving a prospective change, in
the capital stock or in the long-term debt of the Company or
Holdings from that set forth in the Offering Documents;
(3) the Company and Holdings shall have no material
liability or obligation, direct or contingent, other than
those reflected in the Offering Memorandum;
(4) on the Closing Date, the Initial Purchasers shall
have received certificates dated the Closing Date, signed on
behalf of the Company by a Vice President of the Company,
confirming all matters set forth in Sections 9(a) and (b)
hereof with respect to the Company.
(5) on the Closing Date, the Initial Purchasers shall
have received certificates dated the Closing Date, signed on
behalf of Holdings by a Vice President of Holdings, confirming
all matters set forth in Sections 9(a) and (b) hereof with
respect to Holdings;
(d) The Initial Purchasers shall have received on the Closing
Date an opinion (satisfactory to the Initial Purchasers and counsel to
the Initial Purchasers) dated the Closing Date, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Company and Holdings, with customary
exceptions and assumptions, to the effect that:
(1) Each of the Company and Holdings (A) is a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation,
(B) has all requisite corporate power and authority to carry
on its business as it is currently being conducted and to own,
lease and operate its properties, and (C) to the best of such
counsel's knowledge, is duly qualified and is in good standing
as a foreign corporation registered to do business in each
jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a
Material Adverse Effect;
(2) All of the outstanding capital stock of the
Company has been duly authorized and validly issued and is
fully paid and nonassessable, is not subject to preemptive or
similar rights by virtue of the Company's certificate of
incorporation, bylaws or any agreement known to us to which
the Company is a party and except as described in the Offering
Memorandum, is free and clear of any security interest, claim,
lien or encumbrance;
(3) Except as disclosed in the Offering Memorandum,
there are no outstanding rights, warrants or options to
acquire, or instruments convertible into or exchangeable for,
any shares of capital stock in the Company or Holdings granted
by the Company or Holdings, respectively;
19
(4) The Company has all necessary corporate power and
authority to enter into and perform its obligations under the
Operative Documents and to issue, sell and deliver the Senior
Notes to the Initial Purchasers to be sold by the Initial
Purchasers pursuant hereto;
(5) Holdings has all necessary corporate power and
authority to enter into and perform its obligations under the
Operative Documents and to issue and deliver the Guarantees to
the Initial Purchasers;
(6) The Company is not in violation of its charter or
bylaws, and, to the best knowledge of such counsel, the
Company is not in default in the performance of any material
obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in
any other agreement, indenture or instrument material to the
conduct of the business of the Company, to which the Company
is a party or by which it or its property is bound;
(7) Holdings is not in violation of its charter or
bylaws, and, to the best knowledge of such counsel, Holdings
is not in default in the performance of any obligation,
agreement or condition contained in any bond, debenture, note
or any other evidence of indebtedness or in any other
agreement, indenture or instrument material to the conduct of
the business of Holdings, to which Holdings is a party or by
which it or its property is bound;
(8) None of (i) the execution, delivery or
performance by the Company and Holdings of this Agreement and
the other Operative Documents, (ii) the issuance and sale of
the Notes by the Company and the issuance of the Guarantees by
Holdings and (iii) the consummation by the Company of the
transactions described in the Offering Memorandum under the
caption "Use of Proceeds," will conflict with or constitute a
breach of any of the terms or provisions of, or a default
under, or result in the imposition of a lien or encumbrance on
any properties of the Company or Holdings, as the case may be,
or an acceleration of indebtedness pursuant to, (1) the
charter or bylaws of the Company or Holdings, as the case may
be, (2) any bond, debenture, note, indenture, mortgage, deed
of trust or other agreement or instrument known to such
counsel to which the Company or Holdings, as the case may be,
is a party or by which the Company or Holdings, as the case
may be, or their respective properties are bound, or (3) to
the best of such counsel's knowledge, any law or
administrative regulation applicable to the Company or
Holdings, as the case may be, or their respective assets or
properties, or any judgment, order or decree of any court or
governmental agency or authority entered in any proceeding to
which the Company or Holdings, as the case may be, was or is
now a party or to which the Company or Holdings, as the case
may be, or their respective properties may be subject and
which is known to such counsel;
(9) No consent, approval, authorization or order of,
or filing or registration with, any regulatory body,
administrative agency, or other governmental agency (except as
securities or Blue Sky laws of the various states may require)
which has not been made or obtained is required for the
execution, delivery and performance of the Operative Documents
and the valid issuance and sale of the Securities;
20
(10) To the best of such counsel's knowledge, no
consents or waivers from any person are required to consummate
the transactions contemplated by the Operative Documents, the
Preliminary Offering Memorandum or the Offering Memorandum,
other than such consents and waivers as have been or will be
obtained prior to the Closing Date or, in the case of the
Registration Rights Agreement and the transactions
contemplated thereby, will be obtained and made under the Act,
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and state securities or Blue Sky laws and
regulations.
(11) This Agreement has been duly authorized and
validly executed by each of the Company and Holdings and
(assuming the due execution and delivery thereof by the
Initial Purchasers) is a legally valid and binding obligation
of the Company and Holdings, enforceable against each of them
in accordance with its terms, except as the enforceability
thereof may be (i) subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights
generally, (ii) limited by general principles of equity
(whether considered in a proceeding at law or in equity) and
(iii) limited by securities laws prohibiting or limiting the
availability of, and public policy against, indemnification or
contribution.
(12) Each of the Company and Holdings has duly
authorized the Indenture and when each of the Company and
Holdings has duly executed and delivered it (assuming due
authorization, execution and delivery thereof by the Trustee),
the Indenture will be a legally valid and binding obligation
of each of the Company and Holdings, enforceable against each
of them in accordance with its terms, except as the
enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors
rights generally and (ii) limited by general principles of
equity (whether considered in a proceeding at law or in
equity).
(13) The Company has duly authorized the Senior Notes
and, when issued and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms hereof, the
Senior Notes will conform to the description thereof in the
Offering Memorandum, and will be the legally valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforceability
thereof may be (i) subject to applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors rights
generally and (ii) limited by general principles of equity
(whether considered in a proceeding at law or in equity).
(14) Holdings has duly authorized the Guarantees and,
when issued and authenticated in accordance with the terms of
the Indenture and delivered to the Initial Purchasers in
accordance with the terms hereof, the Guarantees will conform
to the description thereof in the Offering Memorandum, and
will be the legally valid and binding obligations of Holdings,
enforceable against Holdings in accordance with their terms,
except as the enforceability thereof may be (i) subject to
applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws in effect which affect the enforcement of
creditors rights generally and (ii) limited by general
principles of equity (whether considered in a proceeding at
law or in equity).
21
(15) The Company has duly authorized the New Senior
Notes and, when issued and authenticated in accordance with
the terms of the Registered Exchange Offer and the Indenture,
the New Senior Notes will conform to the description thereof
in the Offering Memorandum, and will be the legally valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the
enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors
rights generally and (ii) limited by general principles of
equity (whether considered in a proceeding at law or in
equity).
(16) The Registration Rights Agreement has been duly
authorized and validly executed by each of the Company and
Holdings and (assuming the due execution and delivery thereof
by the Initial Purchasers) is a legally valid and binding
obligation of each of the Company and Holdings, enforceable
against if in accordance with its terms, except as the
enforceability thereof may be (i) subject to applicable
bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors
rights generally, (ii) limited by general principles of equity
(whether considered in a proceeding at law or in equity) and
(iii) limited by securities laws prohibiting or limiting the
availability of, and public policy against, indemnification or
contribution.
(17) To the best knowledge of such counsel, there is
(i) no action, suit or proceeding before or by any court,
arbitrator or governmental agency, body or official, domestic
or foreign, now pending or threatened to which the Company or
Holdings is or may be a party or to which the business or
property of the Company or Holdings is or may be subject, (ii)
no statute, rule, regulation or order that has been enacted,
adopted or issued by any governmental agency, or (iii) no
injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction applicable to
the Company or Holdings or any of its subsidiaries has been
issued that, in the case of clauses (i), (ii) and (iii) above,
(a) is required to be disclosed in the Offering Memorandum and
that is not so disclosed, (b) would interfere with or
adversely affect the issuance of the Senior Notes or the
Guarantees, or (c) might invalidate any provision or the
validity of the Operative Documents, the Senior Notes or the
Guarantees;
(18) To the best knowledge of such counsel, there is
no contract or document concerning the Company of a character
required to be described in the Offering Memorandum that is
not so described;
(19) To the best knowledge of such counsel, no holder
of any security of the Company, except as disclosed in the
Offering Memorandum, has any right to require registration of
any of the Company's securities by virtue of the execution of
the Operative Documents, the issuance and sale of the Senior
Notes by the Company or the transactions contemplated hereby
and thereby, other than such rights as will be waived prior to
the Closing Date;
(20) The statements under the captions "Description
of the Notes" and "Business--Legal Proceedings" in the
Offering Memorandum, insofar as such statements constitute a
summary of legal matters, documents or proceedings referred to
therein, are correct in all material respects;
22
(21) Neither the Company nor any subsidiary of the
Company is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(22) When the Senior Notes are issued and delivered
pursuant to this Agreement, such Senior Notes will not be of
the same class (within the meaning of Rule 144A under the Act)
as securities of the Company that are listed on a national
securities exchange registered under Section 6 of the Exchange
Act or that are quoted in a United States automated
inter-dealer quotation system;
(23) The Company (or any agent thereof acting on the
behalf of the Company) has not taken, and will not take, any
action that might cause this Agreement or the issuance or sale
of the Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
Governors of the Federal Reserve System, in each case as in
effect now or as the same may hereafter be in effect on the
Closing Date;
(24) The Indenture is not required to be qualified
under the Trust Indenture Act prior to the first to occur of
(i) the Registered Exchange Offer and (ii) the effectiveness
of the Shelf Registration Statement;
(25) No registration under the Act of the Senior
Notes is required for the sale of the Senior Notes to the
Initial Purchasers as contemplated hereby or for the Exempt
Resales as described in the Offering Memorandum (assuming (i)
that the Eligible Purchasers who buy the Senior Notes in the
Exempt Resales are QIBs or Accredited Institutions, (ii) the
accuracy of, and compliance with, the representations of the
Initial Purchasers and those of the Company contained in
Sections 6 and 7 hereof, (iii) that none of the Eligible
Purchasers is an affiliate of the Company and (iv) the
accuracy of the representations made by each Accredited
Institution who purchases Senior Notes pursuant to an Exempt
Resale as set forth in the letters of representation executed
by such Accredited Institutions in the form of Annex A to the
Offering Memorandum).
(26) Each of the Preliminary Offering Memorandum and
the Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date (except for the financial
statements and the notes thereto and schedules and other
financial, statistical and accounting date included therein,
as to which no opinion need be expressed), complied as to form
in all material respects with the requirements of Rule 144A of
the Act.
In addition, such counsel shall state that it has participated
in conferences with representatives of the Company, representatives of
the Company's accountants, the Initial Purchasers' representatives and
counsel for the Initial Purchasers, at which conferences the contents
of the Offering Documents and related matters were discussed, and,
although such counsel has not independently verified and is not passing
upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Offering Documents (other
than those that such counsel must opine on pursuant to Section 9(d)(20)
of this Agreement), no facts have come to such counsel's attention
which led it to believe that the Offering Memorandum, on the date
thereof or on the date of such opinion, contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary to
23
make the statements contained therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the
financial statements and data and related notes, the financial
statement schedules and other financial, statistical and accounting
data included in the Offering Documents).
(e) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, in form
and substance satisfactory to the Initial Purchasers, and the Company
shall have provided ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ such papers and information as it
requests to enable it to pass upon the matters contained in such
opinion.
(f) The Initial Purchasers shall have received letters from
Coopers & ▇▇▇▇▇▇▇ L.L.P., independent public accountants, on the date
hereof and on the Closing Date, in form and substance satisfactory to
the Initial Purchasers, with respect to the financial statements and
certain financial information contained in the Offering Memorandum.
(g) The Company shall have provided the Trustee and the
Initial Purchasers copies the opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Company
regarding the solvency of the Company and Holdings.
(h) The Company and the Trustee shall have entered into the
Indenture and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(i) The Company and the Initial Purchasers shall have entered
into the Registration Rights Agreement, in the form attached hereto as
Exhibit A, and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(j) The Company shall have entered into the New Credit
Facility and the Initial Purchasers shall have received copies thereof.
(k) The Company shall have fully performed or complied with
any of the agreements herein contained and required to be performed or
complied with by the Company on or prior to the Closing Date.
(l) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably
require for the purpose of enabling them to review or pass upon the
matters referred to in this Section 9 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any
of the representations, warranties or conditions herein contained.
10. EFFECTIVE DATE OF AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at the time that the
Company and the Initial Purchasers execute this Agreement. The Initial
Purchasers may terminate this Agreement at any time prior to the
Closing Date by written notice to the Company if any of the following
has occurred: (i) since the respective dates as of which information is
given in the Offering Documents, any adverse change or development
involving a prospective adverse change which would cause a Material
Adverse Effect on the earnings, affairs, or business prospects of the
Company, whether or not arising in the ordinary course of business,
which would, in the Initial Purchasers' judgment, make it impracticable
to market the Senior Notes on the terms and in the
24
manner contemplated in the Offering Documents; (ii) any outbreak or
escalation of hostilities or other national or international calamity
or crisis or material change in economic conditions, if the effect of
such outbreak, escalation, calamity, crisis or change on the financial
markets of the United States or elsewhere would, in the Initial
Purchasers' judgment, be material and adverse and make it impracticable
to market the Senior Notes on the terms and in the manner contemplated
in the Offering Documents; (iii) the suspension or material limitation
of trading in securities on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market System or limitation on
prices for securities on any such exchange or National Market Systems;
(iv) the enactment, publication, decree or other promulgation of any
federal or state statute, regulation, rule or order of any court or
other governmental authority which in the Initial Purchasers' opinion
causes or will cause a Material Adverse Effect; (v) the declaration of
a banking moratorium by either federal or New York State authorities;
or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which
in the Initial Purchasers' opinion has a material adverse effect on the
financial markets in the United States.
(b) If on the Closing Date, any of the Initial Purchasers
shall fail or refuse to purchase Senior Notes which it has agreed to
purchase hereunder on such date, and the aggregate principal amount of
such Senior Notes that such defaulting Initial Purchaser agreed but
failed or refused to purchase does not exceed 10% of the total
principal amount of such Senior Notes that all of the Initial
Purchasers are obligated to purchase on such Closing Date, the
non-defaulting Initial Purchasers shall be obligated to purchase the
Senior Notes that such defaulting Initial Purchasers agreed but failed
or refused to purchase on such date. If, on the Closing Date, any of
the Initial Purchasers shall fail or refuse to purchase Senior Notes in
an aggregate principal amount that exceeds 10% of such total principal
amount of the Senior Notes and arrangements satisfactory to the other
Initial Purchasers and the Company for the purchase of such Senior
Notes are not made within 48 hours after such default, this Agreement
shall terminate without liability on the part of the non-defaulting
Initial Purchasers or the Company, except as otherwise provided in this
Section 10. In any such case that does not result in termination of
this Agreement, the Initial Purchasers or the Company may postpone the
Closing Date for not longer than seven days, in order that the required
changes, if any, in the Offering Memorandum or any other documents or
arrangements may be effected. Any action taken under this paragraph
shall not relieve a defaulting Initial Purchaser from liability in
respect of any default by any such Initial Purchaser under this
Agreement.
(c) If this Agreement shall be terminated by the Initial
Purchasers pursuant to clause (i) of paragraph (a) of this Section 10
or because of the failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this
Agreement, the Company agrees to reimburse you for all out-of-pocket
expenses (including, without limitation, the reasonable fees and
disbursements of counsel) reasonably incurred by you. Notwithstanding
any termination of this Agreement, the Company shall be liable for all
expenses which it has agreed to pay pursuant to Section 5(j) hereof.
11. AGREEMENT OF THE INITIAL PURCHASERS.
Each Initial Purchaser agrees, severally and not jointly, that, upon
its receipt of any written notice from the Company of the existence of any fact
or the happening of any event that requires the making of any additions to or
changes in any offering memorandum, registration statement or prospectus, or
amendment or supplement thereto, referred to in Section 5(e) hereof in order
that such document will not
25
contain any untrue statement of a material fact or omission to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances existing as of the date such document was delivered, not
misleading, such Initial Purchaser shall forthwith discontinue disposition of
the applicable Notes pursuant to such document until (i) such Initial Purchaser
receives from the Company copies of an amended or supplemented document that the
Company states in writing may be used by such Initial Purchaser or (ii) such
Initial Purchaser is advised in writing by the Company that the use of such
document may be resumed.
12. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement
shall be addressed as follows: (i) if to the Company, to Anchor
Advanced Products, Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: President & CEO, (ii) if to the
Initial Purchasers, c/▇ ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department, and (iii) if to the Initial Purchasers pursuant
to Section 11 hereof, (A) to ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Syndicate Department & Compliance Department, (B) to CIBC Wood Gundy
Securities Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Syndicate Department & Compliance Department and (C) to
NationsBanc Capital Markets, Inc., NationsBanc ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Syndicate Department &
Compliance Department or in any case to such other address as the
person to be notified may have requested in writing.
(b) The respective indemnities, contribution agreements,
representations, warranties and other statements set forth in or made
pursuant to this Agreement shall remain operative and in full force and
effect, and will survive delivery of and payment for the Senior Notes,
regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of any such person, (ii) acceptance of
the Senior Notes and payment for them hereunder and (iii) termination
of this Agreement.
(c) Except as otherwise provided, this Agreement has been and
is made solely for the benefit of and shall be binding upon the
Company, the Guarantor, the Initial Purchasers, any controlling persons
referred to herein and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall
acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include a purchaser of any of
the Senior Notes from any of the several Initial Purchasers merely
because of such purchase.
(d) This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the
State of New York without reference to its choice of law provisions.
(e) This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
* * * *
26
Please confirm that the foregoing correctly sets forth the agreement
between the Company, Holdings and the Initial Purchasers.
Very truly yours,
ANCHOR ADVANCED PRODUCTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: EVP & CFO
ANCHOR HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: EVP & Gen. Mgr. Medical/Dental
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
CIBC WOOD GUNDY SECURITIES CORP.
NATIONSBANC CAPITAL MARKETS, INC.
Acting on behalf of
itself, CIBC Wood Gundy Securities Corp.
and Nationsbanc Capital Markets, Inc.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
27
SCHEDULE I
PRINCIPAL AMOUNT
OF SENIOR NOTES
INITIAL PURCHASERS TO BE PURCHASED
------------------ ---------------
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation.................................... XX,000,000
CIBC Wood Gundy Securities Corp.............................. XX,000,000
Nationsbanc Capital Markets, Inc............................. XX,000,000
$XXX,000,000
28
EXHIBIT A
---------
[Registration Rights Agreement]
[See Exhibit 10.11 to this Registration Statement]
29